Market & Nifty Futures Outlook 3rd Sept. 2010
Nifty Getting Bogged Down at 5505 … ?
As expected the Nifty futures opened with a gap on the back of strong rallies across the equity markets and recorded the day’s high of 5509.90 at the opening itself on Thursday. If a market opens outside the previous day’s range, it can either trade in the direction of the opening trade, it can remain and keep on trading around the opening range or it can revisit the previous range and close the gap and trade to whichever direction from thereon. The Nifty futures seems have opted for a combination of the latter scenarios on Thursday. Therefore, the last trading session can be summarised as follows. The futures traded flat just below the open in the first half of the session, made an excursion to the previous day’s last traded value in the middle of the session, then made a test of the open value which also coincided with the5505 resistance and finally reversed from the resistance area ( at least for the time being ) and finally closed at 5483. Thursday’s trading has lead to the formation of shooting star model candles with tails placed at the top end in the charts of Nifty and Sensex, indicating selling pressure at the resistance area. Therefore, a test of the minor supports below or even the formation of lower high and more correction from thereon can’t yet be ruled out.
